NRE in manufacturing stands for Non-Recurring Engineering. When someone mentions NRE or Non-Recurring Engineering, they’re usually referring to costs.
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WHAT ARE NON RECURRING ENGINEERING COSTS?
NRE (Non-Recurring Engineering) costs are one-time expenses, or things that are only paid once. Think of these costs as the initial investment made when starting any business.
The concept of NRE is pretty straightforward. What becomes interesting, especially for those aiming to manufacture their first electronic device, is to have a clear list of what NRE costs include.
Some companies claim that the cost covers industrial design and prototyping , suggesting your product is ready for production runs. While this is partially true, defining NRE costs solely as industrial design and prototyping is still overly broad.
Below is the breakdown of what NRE costs include in electronic manufacturing.
LIST OF NRE COSTS IN ELECTRONICS MANUFACTURING
- Electronic Architecture Cost
- Industrial Design
- Mechanical Engineering
- Firmware Development
- Prototyping
- Tooling and Assembly
- Certifications
For a more thorough explanation of each cost and to use an NRE Calculator for your project, you can find further information in our post on NRE Costs.
DEALING WITH THE NRE COSTS FOR YOUR PROJECT
While it’s true that NRE costs are expenses incurred only once, it will not be the easiest part of the budget to manage. Setting a fixed budget for NRE costs and expecting the company to adhere to it doesn’t guarantee peace of mind. Whether the allocated budget is sufficient depends entirely on the complexity of the product.
Creating molds for a device will likely be the most expensive part of NRE costs. Projects Titoma worked on have ranged from US$3k to US$250k.
Certifications can also be pricey, costing up to US$20k. Since they require a significant amount of money, it is recommended not to take NRE Costs lightly.
NRE Costs represent money, so it is crucial for the success of any project to ensure that every part of NRE Costs is optimized by reducing the cost. However, be careful not to sacrifice quality at the expense of reducing costs.
TIPS TO LOWER YOUR NRE COSTS
- Reduce the number of parts
- Optimize your Bill of Materials with Chinese components
- From the start apply DFM and DFA in the design of your product
- DFM and DFA enable the implementation of mistake proofing
If you wish to go in more in-depth into those topics please click the links.
NRE MEANING CONCLUSION
While the meaning of NRE is pretty straightforward – Non-Recurring Engineering, in practice, there is a lot of work that goes into each one of the parts that make up a total NRE budget. Optimizing your NRE costs without sacrificing product quality might be the difference between a successful project and failure.
